I am putting together a series of articles, podcasts and web pages that will discuss the Obama Tax Plan. Please let me know your comments or suggestions. I look forward to helping you understand the ins and outs of the new Presidencies tax plan.

Download | Duration: 00:09:29

        

With the end of the year fast approaching, you can cash in on unique tax-saving opportunities that won’t be available once Jan. 1 rolls around. It’s often a case of “do or die” when it comes to taxes. If you don’t act now, you’ll kick yourself later.

Although everyone’s situation is different, following are several strategies you might use to cut your personal tax bill at year-end.
    • Estimate your alternative minimum tax (AMT) liability. It may be possible to avoid or reduce the AMT by postponing certain “tax preference” items to 2009. Alternatively, you might accelerate income into 2008 if your AMT rate is lower than your regular tax rate.

    • Thinking about some year end investing, how about purchasing a rental property while real estate is on sale.

    • Bunch medical expenses in the year you may qualify for a deduction. Your unreimbursed expenses can be deducted only to the extent the total exceeds 7.5 percent of your adjusted gross income (AGI).

    • Avoid estimated tax penalties. No penalty is imposed if your tax payments for 2008, including withholding, equal at least 90 percent of this year’s tax liability or 110 percent of last year’s liability.

    • Consolidate personal debts into a home-equity debt. Unlike nondeductible personal loans, you can deduct the interest paid on the first $100,000 of home-equity debt, regardless of how you use the proceeds. Caveat: The debt is secured by your home, so use this technique with discretion.

    • Use capital gains and capital losses to offset each other. Depending on your situation, you may realize gains or losses at year-end. Any excess loss can offset up to $3,000 of ordinary income in 2008. Remember some capital losses from failed financial institutions are not limited to the $3,000 capital loss limit.  You may have some capital losses that do not have a $3,000 limit.

    • If you own a business, consider hiring your kids before year end and do some income splitting.

Of course, other year-end planning techniques may be appropriate or preferable for certain taxpayers. True tax planning requires an in-depth examination of your particular facts and circumstances. This will enable you to develop a comprehensive tax plan. Always speak to your tax professional prior to implementing any tax planning strategies.

        

Tax planning is the actual forecasting of your current year’s income and expense to determine your current year’s tax  liability then through strategic planning you implement several steps embedded in the U.S. Tax code  to reduce your tax liability.  The reason you should do tax planning is because our greatest bill aside from our room and board is our tax bill.  We spend more time selecting a car then we do tax planning.  Why do you suppose this is true?  My guess would be that the average person fears taxes, does not understand them, only use a tax preparer and not a strategist; thus, they don’t feel they have any alternatives.  My philosophy is to find someone that knows the tax code well enough so they may implement every single deduction, loophole or opportunity possible for your unique tax situation in order to  minimize your taxes. HENCE EFFECTIVE TAX PLANNING.
 
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Effective tax planning goes beyond the traditional and basic stuff you here year after year: 
A) Make more charitable contributions
Invest in a 401K 
C) Obtain a larger mortgage so you can have a larger mortgage interest write off
D) Have more Kids  -  Actually I love Kids  - I have four, but please make sure we are having them for the right reasons and not just for a tax write off!
 
Effective tax planning should include looking at what are your financial goals.  For example,  
a) If you are interested in investing some money, maybe we should look at an Oil and Gas Project that offers you an upfront tax write off of intangible drilling costs, pays you returns on your invested money and has the possibility of hitting an oil well that will pay you royalties well into the future. 
b) If you own a business, are you in the right entity structure to reduce your tax liability or is your entity costing you more in taxes.
c) In this so called down market, have you thought about buying real estate, having a tenant pay your mortgage and then getting a write off for owning the property. 
d) What about turning a hobby into a legitimate business taking write offs on your taxes that you are already paying for but cannot deduct any where else? 
e) Here is my favorite- ever thought about hiring your kids, paying them just enough money so you can still claim them as a deduction but yet you are shifting the income over to them and thus by using the standard deduction they would not owe any tax? 

The ideas I have given you have barely scratched the service of the many ideas you can use to make a plan.
 
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You have listened to all of the debates and now what do they mean from a tax perspective? I have put together a brief audio to help you understand each tax strategy. Each candidate has some good and bad. Please let me know your thoughts.

Download | Duration: 00:08:51

        

Fail to plan, plan to fail!
When it comes to taxes, you want to have a plan. I have seen clients who fail to plan and get into an IRS mess. Listen to these strategies that can help you. Call COHESIVE™ today to set up a year end tax planning session. Let us help you make a plan to succeed!

Download | Duration: 00:00:00

        

After watching the last presidential debate, were you not just eager as ever to meet Joe the plumber?  Does this little episode make you wonder if anyone will tell the complete truth?   Well there are two things I know for sure and that is death and taxes.  I cannot do much about death but I can certainly help you make a common sense approach to taxes, accumulating assets and business planning.  I am going to be holding a business boot camp in November and I invite anyone who has a business or is thinking of starting business to join us. 

You will learn  business 101 in an action back four hours of camp,

        

Being in control of your financial destiny requires action. There is a lot of advice out there, but if you do not follow the advice it is not going to help you. Here five very simple steps you should do now to help secure your financial future:

1) Go through your checking account, ATM card statements and credit card statements for at least three months and make a list of all the items you spend your money on each month. Put everything on this list, because it will be the start of your financial plan. If you see $100 coming out of the  cash machine every week, make a note of that expense as well. Once you determine your spending pattern for three months, make a list of your average expenses by category. For example, if you see you are eating out a lot, add up all expenses from eating out for the three months to get the total. Divide this total by three to get your average monthly expense for eating out. Use this number as your monthly budget number for eating out. Whether it is $100 or $300, write it down.   Do this for all categories. Once you see where your money is being spent, you can start getting a feel for how much you need each month.

 2) Once you have added and averaged the monthly numbers for all categories and have put together a monthly budget, take a hard look at this budget and ask yourself if there is any excess spending. Are there things you can certainly do without? Make a list of those things as well.

 3) Total these expenses and subtract them from your original budget, and this is the amount of income you must bring into your household every month. If you do not bring in this amount  every month, then you must be living off credit cards, charging items but not able to pay for them in full every month. This is a costly mistake that will eventually explode. 

 4) Immediately stop spending more than you are bringing in each month. If you feel you do not have enough money to make it even if you cut out all the frills and waste in your spending, it is time to look at other income sources.

 5) Do you have the time to work a part-time job or start a business? With what is happening in our economy, having your foot in the door of another company may not be a bad option. This provides the opportunity to make more money and the possibility of another job if your employer has layoffs. M next blog session will tell you how to start a business..